{"id":1004703756,"date":"2024-02-27T03:00:01","date_gmt":"2024-02-27T11:00:01","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004703756"},"modified":"2024-02-27T06:35:20","modified_gmt":"2024-02-27T14:35:20","slug":"avison-young-default-downgrade-pave-way-for-restructuring","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/avison-young-default-downgrade-pave-way-for-restructuring\/","title":{"rendered":"Avison Young Default, Downgrade Pave Way for Restructuring"},"content":{"rendered":"\n<p><\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"alignright size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"800\" height=\"600\" data-attachment-id=\"1004703777\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/mark-rose-5\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/02\/Mark-Rose-edited.jpg\" data-orig-size=\"800,600\" data-comments-opened=\"0\" data-image-meta=\"{&quot;aperture&quot;:&quot;10&quot;,&quot;credit&quot;:&quot;Matthew Plexman&quot;,&quot;camera&quot;:&quot;IQ250&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;1460469466&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;120&quot;,&quot;iso&quot;:&quot;100&quot;,&quot;shutter_speed&quot;:&quot;0.008&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;1&quot;}\" data-image-title=\"Mark Rose\" data-image-description=\"\" data-image-caption=\"&lt;p&gt;Mark Rose&lt;\/p&gt;\n\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/02\/Mark-Rose-edited.jpg?w=800\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/02\/Mark-Rose-edited.jpg\" alt=\"\" class=\"wp-image-1004703777\" style=\"aspect-ratio:4\/3;object-fit:cover;width:400px\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/02\/Mark-Rose-edited.jpg 800w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/02\/Mark-Rose-edited.jpg?resize=300,225 300w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/02\/Mark-Rose-edited.jpg?resize=768,576 768w\" sizes=\"auto, (max-width: 800px) 100vw, 800px\" \/><figcaption class=\"wp-element-caption\">Mark Rose, CEO of Avison Young. <em>Image courtesy of Avison Young<\/em><\/figcaption><\/figure><\/div>\n\n\n<p>The situation reached a turning point last Friday, when <strong>S&amp;P Global Ratings<\/strong> cut <strong>Avison Young<\/strong>\u2019s issuer credit rating to \u201cSD\u201d (selective default) from \u201cCCC\u201d and lowered the issue-level rating on a $325 million senior secured term loan to \u201cD\u201d from \u201cCCC-.\u201d<\/p>\n\n\n\n<p>The rating agency\u2019s actions stemmed from Avison Young\u2019s defaults on required quarterly principal and interest payments in the third and fourth quarters on its senior secured term loan.<\/p>\n\n\n\n<p>S&amp;P acknowledged that the Toronto-based company \u201cremains current on its debt service obligations under its revolving credit facility.\u201d The agency nonetheless revised its assessment of Avison Young\u2019s management and governance from \u201cmoderately negative\u201d to \u201cnegative.\u201d<\/p>\n\n\n\n<hr class=\"wp-block-separator has-text-color has-cyan-bluish-gray-color has-alpha-channel-opacity has-cyan-bluish-gray-background-color has-background is-style-wide\"\/>\n\n\n\n<p><strong>READ ALSO:<\/strong> <a href=\"https:\/\/www.commercialsearch.com\/news\/centersquare-strategist-the-long-awaited-reset-is-here\/\">Is CRE\u2019s Long-Awaited Reset Here?<\/a><\/p>\n\n\n\n<hr class=\"wp-block-separator has-text-color has-cyan-bluish-gray-color has-alpha-channel-opacity has-cyan-bluish-gray-background-color has-background is-style-wide\"\/>\n\n\n\n<p>Yesterday, Avison Young said it is agreeing to \u201ca comprehensive deleveraging transaction with its current financial partners\u201d and declared that by taking this course of action, it \u201creduced its financial obligations by more than half and has secured additional capital&#8230;\u201d<\/p>\n\n\n\n<p>Avison Young CEO Mark Rose touted, in a prepared statement, the company\u2019s incipient \u201cmore sustainable capital structure\u201d and said that its principals and management will retain a significant majority ownership stake in the company. That presumably includes the company\u2019s nearly 700 partners.<\/p>\n\n\n\n<p>All of this comes just weeks after <a href=\"https:\/\/www.commercialsearch.com\/news\/avison-young-acquires-additional-business-lines-from-madison-marquette\/\">Avison Young bought<\/a> another slice of Madison Marquette, this time specialty leasing, retail property management, marketing and leasing businesses. <\/p>\n\n\n\n<p>The restructuring transaction should close in March. Centerview Partners LLC, Kobre Capital LLC and Long Castle Advisors Corp. served as financial advisors. Meanwhile, Stikeman Elliott LLP (Canada), McDermott Will &amp; Emery LLP (U.S.), and DLA Piper LLP (U.S. and U.K.) served as legal advisors. C Street Advisory Group served as communications advisor.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-avison-young-restructuring-news-reactions-reverberations\">Avison Young restructuring news: Reactions, reverberations<\/h2>\n\n\n\n<p>Understandably, the pace of news over the weekend was rapid.<\/p>\n\n\n\n<p>On Saturday, <em>Bloomberg<\/em> reported that Rose had stated that the restructuring will eliminate \u201csignificantly more than 50 percent\u201d of Avison Young\u2019s obligations, and that the company\u2019s board will no longer have non-independent directors. Rose also called the default \u201cpurely technical,\u201d as it was based on a non-repayment that Avison Young and its lenders had agreed on as part of the pending restructuring.<\/p>\n\n\n\n<p>Meanwhile, <em>Bisnow<\/em> reported, based on an interview with Rose, that the senior term loan had been taken out in 2019 to fund the acquisition of U.K. brokerage GVA Grimley and to pay down debt that was maturing in 2021. Also in the picture are a $60 million revolving credit facility and a $65 million equity investment from Canadian pension fund Caisse de d\u00e9p\u00f4t et placement du Qu\u00e9bec, which had provided Avison Young with a $250 million equity investment in 2018.<\/p>\n\n\n\n<p>The Avison Young board will be slashed from 11 to just five members. Besides Rose, the new board will have two independent directors appointed by the company and two appointed by its lenders, according to <em>Bisnow<\/em>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The slump in CRE transactions took a toll on the firm. What\u2019s next?<\/p>\n","protected":false},"author":882,"featured_media":1004423116,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21784,21808,21825,23891,21742],"tags":[33022,33545,34187],"class_list":["post-1004703756","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-brokerage","category-featured","category-finance","category-national","category-latest","tag-avison-young","tag-mark-rose","tag-sp-global-ratings"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v24.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Avison Young Default, Downgrade Pave Way for Restructuring - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"Following a default, S&amp;P downgraded Canada-based Avison Young, which triggered a quick-paced process leading to its restructuring. 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